Fireside Chat | Innovation Ecosystem Prosperity

Foreign. Welcome back. We weren't going that long. This is the second annual SBA Innovation Ecosystem Summit. Don't forget to share your feedback with us via the link. Going to be sharing in the chat right now. And to lead our final session of the day is our very own Director of Ecosystem Development and my co host, Jennifer Sheen. I know I'm definitely not an unsung hero, but thank you. Hi, everyone. We are at our last session of the day, and I'm so excited to lead this conversation with our special guest, Jordan Blashek. You know, I don't know which side he's on for me now. I'm starting to think about that, but Jordan is the president, chief operating officer, and co founder of America's Frontier Fund, where he oversees the strategy, management, and operations of the organization. Previously, Jordan was the vice president of Business formation at Schmidt Futures, a new policy, philanthropy and investment fund founded by former Alphabet chairman Eric Schmidt and his wife, Wendy Schmidt. Jordan's also the author of the bestselling nonfiction title, A Democrat, A Republican, and A Search for Common Ground. He currently serves on the board of Operation Gratitude, a nonprofit organization that serves America's first responders and military veterans. He was the founding chairman of the Chief of Staff association and a venture partner at J Ventures Fund. Jordan graduated with a bachelor's from Princeton University, a J.D. from Yale Law School, and an MBA from Stanford Graduate School of Business. Somebody who's always learning, it sounds like, but he started his career as an infantry officer in the US Marine Corps, where he served two combat tours in Afghanistan and the Horn of Africa. He completed his service after five years, reaching the rank of captain and receiving numerous awards for leadership. Jordan, thank you so much for joining us today and welcome. I just described quite a broad variety of activities in your background, and so I'd like to start by asking you a little bit about how you first got involved in Venture and why.

Jennifer, thank you so much for the introduction and for hosting me, and congrats on an amazing Innovation Ecosystem Summit today. So I ended up in Venture sort of by accident, starting in college. And throughout the last decade of my life, I've really just wanted to serve my country, first in the US Military and then coming out of it. And really what I wanted to work on was national security policy. And a series of events kind of led me to believe that technology is one of the most critical things we need going forward to maintain US Leadership globally and also to keep us safe at home. Um, and when I really dove into this question of, of how do we continue to lead in technology. I think one of the things that that really struck me was you need both amazing entrepreneurs and amazing R and D. But you also need capital. And if the capital is not there, it's very hard, no matter how talented the person, to be able to get their innovation off the ground. And that kind of led me to work with Eric Schmidt at Schmidt Futures and eventually to start America's Frontier Fund. Cause I. I deeply believe that without the right capital, entrepreneurs can struggle and struggle and struggle and they won't get the fuel they need to thrive. And so that kind of led into what I'm doing now with America's Frontier Fund.

Well, and America's Frontier Fund, it is a fairly lofty name. I mean, we like to call the Small Business Innovation Research and Small Business Technology Transfer Programs America's Seed Fund. And that's mostly because we have too many acronyms. And it takes a long time to say it all without the acronyms. But can you tell us a little bit about the origin story then for America's Frontier Fund? And so, you know, we had your personal journey into it, but how did it come to be?

Yeah. So America's Frontier Fund, and hopefully we could become partner organizations, and the seed fund and the Frontier Fund can work together hand in hand. It started about a year and a half ago, just between my co founder, Gilman, Louie and I, and we were having a bunch of conversations about how to reignite the innovation engine in America. And one of the things we deeply believed was that if you could really marshal the capital markets and you could marshal the amazing R and D and talent we have in the country, that you could unlock this new wave of innovation. And at the same time, we saw the US Government getting ready to really invest back into the American innovation base in a big way. And I know you all are working on this in various ways. The Chips act with Commerce and the Inflation Reduction act with DOE and the Office of Strategic Capital with DoD are all a reflection of this huge commitment back into the American innovation base. And as we saw that, Gilman and I believe that there needed to be some bridge between the government and the private sector. And previously Gilman had done that with In Q Tel, which is the CIA's venture fund. And so we took parts of that model, which were a nonprofit organization, to say we could create a venture fund out of a nonprofit. And that really was the genesis of our model. And as we thought about, like, how do we signal the public benefit mission? Like that we truly care about rebuilding America's innovation base that kind of led us into the name, which is, you know, at the end of the day, it's for America. And we love the idea of the frontier. It's such an evocative word that suggests sort of the American ethos of conquering, you know, the next horizon. And so naming it America's Frontier Fund to us really captured the ethos of, you know, for the country and pushing forward kind of this, this next boundary in our, in our, in our future as a country.

Yeah, it definitely it, it makes me also think, of course about Star Trek, but also that, yeah, the boundary pushing and, and, and the naming of how the, the kind of focus that you have in America's Frontier Fund in terms of the types of technologies that are going to be pushing the frontier. I feel like there's been a, there have been challenges around actually trying to figure out, like what do we call high tech, deep tech, frontier tech, hard tech? I think I've also heard maybe be used. So I appreciate also all of the imagery that the name evokes. So what were some of the specific challenges that you were seeing that made you want to put your focus here on that frontier tech? And maybe, actually I probably should explain. What is it? What is your investment thesis? What focus on investing in?

So America's Frontier Fund looks at the intersection of scientifically driven companies, so companies that are, that are pursuing some scientific breakthrough and how that can be commercialized into the market and things that are strategic for the United States that have some big application that will support continued U.S. leadership or domestic security. And the reason we think that's so important is, you know, for the last hundred years, technology has really driven so much of America's prosperity. Its leadership in the world, our military prowess, it's underpinned so much of our leadership in the world. And what we've seen over the last decade is that all these new frontier technologies are coming to market almost at the same time. And you can look across, know, AI, semiconductors, advanced materials, energy, and you just have this wave of new possibility coming. And I think at the same time we also see that other countries are competing, they're racing to, to capture those breakthroughs first. And whoever kind of achieves leadership in these technologies gains enormous advantage. And so for aff, that's where we wanted to focus at this intersection of frontier technology and US Strategic advantage. And we believe that there's this unique moment right now for a lot of reasons. One of them is that the last wave of innovation has kind of come to an end. So we saw this incredible growth in the Internet and all these tech companies built on top of the Internet over the last two decades. And those are kind of hitting the end of the asymptote and they're becoming more incremental, less disruptive in nature. And what that means is there's going to be all this capital now going in search of what is the next disruptive innovation. And so you're having the capital markets begin to shift towards these new areas. You're also getting the US Government deeply engaged in these, in these technologies and wanting to make sure that the US kind of maintains its leadership. And finally, I think you're seeing interest on the entrepreneur side. You're seeing people believe that they really want to tackle the hardest problems. That's the area to go. And so that's, that's where AFF is really excited to, to, to bet on those founders to help them get the capital they need to, to thrive and to make sure that America continues to lead in these areas and believe we have a special value to add is at that incubation stage. So partnering from the very beginning with a founder, helping them build their team, kind of de risking that first stage of development and bringing in other capital providers in order to begin to hit scale.

And I think that's definitely a place where the federal government has played a big role historically and continues to try to be there in being very long term, thinking very long term about these efforts that, and how to support and create an environment where those types of technologies and innovators can be supported. And I really appreciate that, you know, both you and your co founder Gilvin Louie had come from, you know, probably also having a little policy wonkishness in the background of seeing where some of the conversations and bills were going where you'd be able to start building different pieces and figuring out how the public sector and private sector and federal government and maybe state government could also have all these different pieces that come together. And so it seems like, especially as you're talking about how you're going to be building and supporting founders at a very early stage, you're trying to bring and serve as a convener, bringing lots of different ecosystem pieces together. And so I'm curious how you might describe that or what are these different pieces that you're looking to bridge and connect?

Yeah, absolutely. That's a great question. I think we believe that the private sector and the government each have things they're really good at. And the thing the government is really good at is they can shine a light on areas that they think are really important. And the US Government has done this extremely well over the last decade, basically signaling to universities and researchers where the US Government's priorities are. And that's in putting out critical technology lists and directing R and D where they want activity to go. And our private sector is the greatest engine of value creation in the world. And I think it does its best when it can bet on entrepreneurs who are taking risk, and the capital markets can figure out how to assess that risk and then invest accordingly. And where AFF can play a unique role is in bridging those two communities, taking essentially the government's priorities and helping identify where we see real potential in the R and D base and in the markets, developing sophisticated theses for investment, and then using our own capital to take that early risk so that we can then partner with the rest of the private sector in order to take that emerging company into full commercialization. And so on the government side, I think using our policy wonkishness, we can engage early with policymakers, share our own views of where we think the real opportunities are and what's strategic for the United States, using our scientists and our investors to really go deep into these tech areas. And then we can take that and go to the investment side and say, this is why we're putting our money into these technologies. And the private sector should trust us because we have long track records as good investors, and our skin is in the game with them to build these companies. And, and so that's. That's the role we. We really want to be able to play is that. Is that translator between public and private.

There's two different directions. My. My brain is like, going into and following up, so I'll have to try to remember one of them for later. But I did want to come to. Well, we all start with this one, which is, you know, you raised the word trust, and that's actually been something that has come up a lot over both days of the summit, where, you know, because we're talking a lot about collaboration and partnership and trust, I guess. What are some of the ways that. Or what do you look for in potential partners to bring in and, you know, how do you start to build that trust that we have common goals and missions that are aligned and that we can work together? What are some of the ways that you see as collaborative partnerships?

To us, trust is something that's built over time, and it's something that we know that we have to do as we go to look to partner in regions across the country. We know that it starts day one, but it's a long process to build trust. But I think there are some factors that go into it. I think the first is, is leading with values and being very clear about, about what we're doing. It's part of why we chose to be a nonprofit to call ourselves America's Frontier Fund. We want to make very clear to everyone that first and foremost we care about our mission and ensuring that America continues to be the technology leader in the world. I think the next is the incentive structure and incentives, I think Warren Buffett said it, but it's incentives are superpowers. And so we like to align our incentives with those of our partners to make sure that they know we're, you know, we have skin in the game alongside them, that we're deeply committed for the long term based on the structure of the relationship. And then lastly, it's to be there on the ground together repeatedly over time. And so wherever we go, we want to make sure that we're constantly going to visit because there's, there's nothing to replace that sort of in person development of, of relationships and trust. At the end of the day, it's, it's a relationship. And so that's how we think about our partnerships. And where, where we see a lot of opportunity today is that there are burgeoning tech clusters or innovation regions across the country. I'm so sorry about that. Burgeoning tech hubs across the country. And those, those tech hubs have local stakeholders, they have the local governments really engaged to figure out what can we do to attract talent, capital and entrepreneurship. And we want to go be their partner in that effort and to sort of connect our national policy capital and expert networks down to the local level. But in order to do that, we have to be there and we have to go visit and we have to spend time together to understand, you know, what are the local challenges, what are the local capabilities and how can we work with both in order to create a vibrant hub. And that would be my main message to your audience today. It's, it's that we're, we're truly at a unique moment in, in U.S. history where the federal government has made such a massive commitment to a new industrial strategy and it just unlocks such incredible opportunity in regional hubs across America. And I think there's a willingness and an openness to fund new innovative ways of partnering or catalyzing innovation that's really exciting. And I think it's going to lead to all kinds of new collaborations and efforts and will hopefully lead to this amazing new era of innovation and prosperity across the country.

Well, I don't know if you've ever seen that thing where it's like if somebody says the title of a movie, you should cheer. You just kind of hit on the title of our session on innovation. Innovative Innovation, Ecosystem Prosperity. But I think what you're referring to also is, I mean, just a couple of weeks ago, I think AFF was in the news and about raising some money from New Mexico's State Investment Council into your the first fund. Could you talk a little bit about, you know, help people understand what. What is this and what's going on there?

Absolutely. We're so excited about this partnership with New Mexico and America's Frontier Fund. So the New Mexico State Investment Council made a commitment to our fund for $100 million. And as part of that commitment, we're going to be building a new deep tech venture studio in Albuquerque. And the thing that really excites us is that New Mexico has incredible R and D. They have Los Alamos Sandia, they have Air Force Research labs, the University of New Mexico. There's just such an amazing ecosystem for R and D, and yet New Mexico gets very little venture capital. So I think there may be, I forget the exact number, but it's like 42nd in the nation in terms of venture capital inflows. And so to us, that speaks to this massive imbalance where if we can help catalyze the creation of new companies based on really cutting edge R and D from America's top labs, we can really begin to attract more investment capital to build out the ecosystem in New Mexico in a really vibrant way. And so we see this as sort of the anchor for EFF strategy to build these ecosystems for frontier technology across the country, really rooted in areas that have tremendous R and D assets that are federally funded and have some of the top researchers in the country, and yet, because they don't have easy access to venture capital, have just been under commercialized for that R and D. And so that's what we're aiming to do in New Mexico. And then we're excited to expand that model to new areas, kind of building off the trust, hopefully we built with New Mexico to do similar things in new areas.

Yeah, and I'm going to take this opportunity to also highlight that New Mexico State University and Arrowhead center there is one of SBA's federal and state Technology partner program awardees. And actually next week they are hosting the New Mexico Innovation Summit. And So highlighting, you know, New Mexico has a lot, does have a lot going on, including specifically support for companies looking to leverage America's seed fund. And you know, I think it's really great to talk about sort of that, you know, where there, where you see those disparities, right? You saw that big disparity in terms of the venture capital investment, but then there was a lot kind of at the front of or top of funnel coming in there. So how do you help even that out a bit more? I'm curious your thoughts. And we were talking about founders as well and how you support startups, but in terms of the inclusiveness and diversity and bringing all Americans into the innovation economy and having access to the innovation ecosystem prosperity that we're going to be building into the future, you know, how does AFF think about that and how are you being intentional about supporting inclusion and equitable access?

Great question. So it actually relates to New Mexico in a way. One of the things that's happened to New Mexico over the last few decades is that when they did have companies that would spin out of the labs and get going, often what would happen is for those companies to reach their next scale, their next stage of scaling, they would have to move to one of the more established tech hubs. They'd have to go to San Francisco or to Seattle or San Diego in order to get the talent and capital they needed to thrive. And that deprived New Mexico of that company and all the jobs that could have been created by that company. And so one of the things we believe is new today is that the rise of virtual remote work post Covid has unlocked the ability to get talent to areas of the country that that previously might not have been able to access it. So rather than have to go to San Francisco in order to get the engineers it needs, a company can now stay in New Mexico, get the specialized talent that might only be in a few parts of the country, but then really focus on all the other jobs that get created in their home state. And I think the thing that can really make that flower is that public private collaboration. So to the extent that the combination of federal and state funding can build a more vibrant ecosystem, creating more skilled trade jobs, creating more infrastructure that startups can take advantage of, it gives a really good reason for those startups to stay in their home communities and for that community to benefit from all the jobs and value that gets created, even as the startup takes advantage of national capabilities, specialized talent that maybe, you know, there's just only a handful of them across the country. And so to us, that that is one really big powerful way that you create a more equitable, vibrant ecosystem around the country. Because startups can stay in their home community, they don't have to fly to the handful of traditional tech hubs. And, and in doing so, I think those ecosystems grow exponentially. You know, the more companies you have that stay in one area, the more the alumni can go create new companies, the more wealth transfers into the community and, and doesn't again just fly to those five traditional tech hubs.

Yeah. And you know, I think just kind of combining a couple of those things and centering the entrepreneurs and portfolio companies, you know, how, how are you thinking about leveraging these partnerships between state, federal government and then especially private sector investment and sort of creating those conditions and signaling to, to support the portfolio companies directly.

We really want, for many of the companies we create, we want to be their co founder. We've really focused on the venture studio model because it allows us to be that co founding partner and to really work hand in hand to figure out how to make the most of the state and local support and how to really design for success in the private market. I remember talking to one entrepreneur in Tulsa. She's an incredible entrepreneur working on a really sophisticated, sophisticated battery technology that is world class. And she really struggled to raise venture capital early, early on because she didn't have a partner to kind of help her understand the ecosystem in Silicon Valley to raise money or a supportive local government that could provide early research support or facility space or other things to help her get off the ground. And so our vision is that we could be that partner for entrepreneurs across America and really work hand in hand to figure out what do they need to do to thrive in the venture capital ecosystem and how can they best take advantage of all the different resources the US Government has to offer to support new entrepreneurs.

And so then for some of those entrepreneur support organizations and ecosystem builders that are here in the audience today that might not have experience working with the government, what have you learned about state or federal partnerships and opportunities that you think other entrepreneur support ecosystem builders should know and explore?

So in my experience, I think everyone I've met on the state or federal side has just unlimited desire to help the entrepreneur. Everybody I've ever met in the government just deeply believes in what they're doing and their mission to support the United States and it's citizens and the companies. I think the challenge on the federal government side or the state side is one that there's a lot of incoming and so they have a lot of people demanding their time or who are seeking support. I think the other is sometimes it's the way of engaging doesn't lead to that, to use your phrase again, that early trust. And so what I'd encourage people to do when they're thinking about working with the government, trying to find support is to try to find people behind it. Rather than just kind of submit things through an online portal, you know, do outreach, use LinkedIn, find someone who can kind of help guide them through the process. And that could be internal to the government or external through a group like us who can help kind of shepherd them through. Because at the end of the day I do think that the big problem is just finding that person to person connection where you can trust. Like I know who is helping me and why they're helping me. And so I'd really make the case that at the end of the day this is all personal and based on trust. And the more you can find the person behind it, I think the easier it will be to navigate.

I really appreciate that. And I see Jamila on screen, which means to wrap things up, maybe I can bring it to a quote that you was in the announcement about New Mexico's investment in the Frontier funding, which was. We believe that the next decade could see more breakthrough innovation than the previous five combined. So let's leave with your biggest vision for how government venture funds, entrepreneur support organizations, you know, the innovation ecosystem writ large. How can we create the most fertile ground to achieve that breakthrough innovation, not just in the lab, but really get it out there so that it's creating the impact that we are aligned on our mission to see.

So I, I believe that we are seeing the convergence of three of the biggest trends in the last half century and that is the US Government's investment back into the American innovation and manufacturing base, which will just catalyze huge amounts of opportunity and make it better to invest in America than it is anywhere else in the world. You're seeing the convergence of all this new R and D that has been funded for decades, reaching tipping points, entering the commercial market in areas like AI and advanced materials and new energy. And you're seeing entrepreneurs come out across the country looking to solve huge problems with more capital available in the private sector than ever before. So all those things together make this truly a unique moment in US history and I couldn't be more excited for where it's going to go over the next decade.

Jordan, thank you so much. It was such a pleasure to have this conversation with you. I'm definitely looking forward to our future collaborations. We really appreciate your time. Can people. How can people reach out to you if they want to connect with you or with America's Frontier Fund?

Absolutely. So they could find our website@amer Americasfrontier.org or they could reach out to any of our teammates on LinkedIn. They can find us easily and we're super responsive on LinkedIn.

Thank you so much, Jordan.

Thank you, Jennifer.

To you, Jamila. Thank you. Thank you, Jennifer and Jordan, for that great discussion. I see the chat is blowing up, so let's give them an emoji or a gifty round of applause because that's what we do here. And don't Forget to visit AmericaSeedFund US website to get involved with the SBA innovation ecosystem. And make sure you bookmark that site so you can access all the show notes and all the replays from the last two days. Unfortunately, we are nearing the end of our time together, but we're not quite done yet. Please stick around. Don't go anywhere. We'll be right back with closing words from Associate administrator Bailey Devries.